Using Balance Transfers For Profit

Not as much as you might expect. A drop of 10-30 points is to be expected, but paying everything back on time should actually help your credit profile. It should also help your credit line increase even more in following years. There are more questions here on the FAQ where I will delve deeper into that issue.

4.) What is an App-Spree and when should I do one?

The main rule with an App-Spree, is to get all your applications in on the same day. This way, when they pull your credit report, they don't see a bunch of other applications since they haven't had time to post on your credit report yet. Having those applications on there isn't a bad thing, but it may hurt your chances of getting accepted for more cards. If you want to get fancy, you should do it early in the week, and start early in the day. I'm personally on the fence as to whether that's important or not. I didn't do either on my first Spree, and it went fine.

5.) How many cards should I get?

A general "App-Spree" will include 10-25 cards, and anywhere from 1-6 cards per issuer for personal cards. As for business cards, you can usually tack on just as many for a given issuer. A Spree isn't for everyone though, and there is still plenty of money to be made, even if you apply for just a couple cards.

With Discover you can only be approved for 1 personal, and 1 business card, per month, but with Chase, many people get accepted for 6 cards or more. When considering American Express, I would usually stick to 2-3 personal cards. For the other cards I have listed, all are worth applying for in a Spree unless I have it noted otherwise. Basically, I have the site setup so you can sign up for almost every card, without having to worry about going too far.

6.) Should I transfer the entire credit line?

This is where strategy and knowledge becomes important. Right now, lets concentrate on personal cards. If you utilize 49% or less of your credit line, there won't be any adverse reaction to your credit score, or getting accepted for future cards. If you utilize 89% or less of your credit line. you're still in good shape. Most people report having no problems doing this for multiple years, but it is more of a risk. If you use 90% or more of your total credit, you are running a higher risk of having your credit lines and score decrease.

Either way, once you pay off your balances at the end of the year, your score will recover. You have to decide however, whether it's worth a little stronger hit to your credit score during that period. The difference in profit between 49% and 89% is so large that a lot of times, unless someone is going to be trying for some sort of other loan, or something that will involve their credit score, they will go for the higher utilization. Thus, letting their score drop a little further during that period, while making a lot more money. The difference between 89% and 100% is much smaller, and the risks to your score, and accounts, are much larger, so few people ever go for full utilization. If you have other credit lines, it's very hard to reach that point anyways. Check out the topic below for more information about "overall utilization."

These percentages are mainly important if you are planning on doing this for multiple years, for a single year, this wouldn't really matter. When you are dealing with business cards, shoot for the moon. They do not report your credit utilization, yet another reason to try for as many business cards as possible.

7.) Is there a difference between card utilization, and overall utilization?

I know this can get a little complicated, but it only sounds confusing. The only thing that really matters is your "overall" utlization, so when I refer to utilzation, this is what I'm talking about. If you have other lines of credit open, that you won't be using, you can actually transfer more money from your 0% BT cards. For example, if you had a couple cards that you use for spending, business, etc., and those credit lines equaled $100,000, and the cards that you got for balance transfers had lines that equaled $200,000, you could transfer all of that $200k, and still be utlizing only 66% of your overalll credit lines if you didn't have any balance on your "spending" cards. This is a really simple example, and you'll have to do the math for your individual situation, but hopefully that gives you an idea of how to calculate your "overall" utlization.

8.) How do I get the money into my bank account?

One of the most common questions, is how you actually go about transferring that money from your new credit cards, into your checking/savings account. There are a couple ways to go about this. The most popular, and probably the fastest method, is to use your banks debit card linked to your account, and either request the transfer on your application, or wait until afterwards, and request the transfer to that card either over the phone, or on the internet. As far as their concerned, it just looks like another credit card, which is actually what these balance transfers are usually used for.

Another way to transfer your money, is to use the free balance transfer checks that they send with your welcome package. You just write the check to yourself, go to your bank, and deposit it. This way you know there won't be any problems, but some people feel uncomfortable taking that big of a check to their bank. Other ways include, calling the issuer and requesting it that way or doing an ACH transfer online, etc. As you can see, there are plenty of ways to transfer the money, you just have to figure out the way you feel most comfortable with.

Here is an updated thread from our forum, specifying which method is currently working best with each individual card company. Click Here

9.) Is this strategy for everyone?

There are some people that I recommend not using this system. If you are going to be applying for a home loan, or large car loan in the next couple months, I wouldn't recommend doing this. The home loan is most important because even a tiny change in interest, can equal thousands of dollars. Even though this doesn't change your credit score much, you want the best possible rate. I also don't recommend this to someone that can not keep up with paying bills. Even if you're using the online money center, and get reminders when every bill is due, you still have to go to the website and pay it. If you're not at a point where you think you can manage this, hold off for a while.

10.) Should I track my credit score?

Many people do, not only to watch their score, but also to see any unknown delinquencies that need to be taken care of. I have some good options listed in our credit tracking section, all of which I've used. They are good sites, and most offer a 30 day trial, so you can check your score and cancel before the 30 days, at no charge. Tracking your credit report can also end up raising your score, see "bumping" below.

11.) What is bumping your credit score?

A very new strategy for raising your credit score, is referred to as "bumping," which is basically erasing the "soft pulls' on your credit report by checking your credit report. Soft pulls appear on your report after a credit card issuer looks at your score, usually because you're applying for a new card, or increasing your credit limit. As I understand it, the history is 100 "pulls" long, and everyday that you check your score, it "bumps" that pull one step closer to being knocked off your credit report, thus increasing your score. Obviously this would usually take 100 days to completely clear all the "pulls" from your report, but some people are actually using a couple different tracking services, updating their score on each one every day, and clearing their report in about a month.

There is currently users in our forums, reporting 5 point increases in just a couple days, using only one tracking service. We are trying to track down the best companies to use for "bumping," but I have added True Credit onto the credit tracking page since it has been confirmed as a good site to use. I've also heard the Experian site is good to use, but Equifax is still up in the air. I will update this section as we make more progress.

12.) Can I still make purchases on these cards?

NO. Any cards on which there is a balance transfer, should not be used for purchases. Keep your personal and transfer cards separate. If you make a purchase on them, that purchase will not be eligible for the 0% offer. It will be charged the regular APR every month until you pay off the entire balance. There are exceptions, but as a general rule you should shy away from it.

13.) The site name says it is your credit strategy, did you invent this technique?

Absolutely not, when you shop around for a domain name nowadays, you'll find your options are extremely limited, and this one at least made a little sense. There have been individuals and groups experimenting with this for a while, but I do believe this is the first major site to bring all of that information forward in one, easy to find place. An extreme debt of gratitude go out to those that shared their experiences, and helped me get this started.

14.) Is everything on this site legal?

Yes, there is nothing illegal about using this strategy. Credit card companies put this offer out there, and allow you to use that money free for 6-15 months to do whatever you'd like. They know people have been doing this, but they are counting on individuals defaulting or making a mistake. I try to ensure that doesn't happen.

15.) Why should I use this site for applications?

There are hundreds of choices out there for credit cards, the problem most people run into when trying to pull this off, is they don't read the fine print, and if they do, they aren't quite sure what to look for. If you use the wrong applications, you can get yourself in quite a bit of trouble, that is why I thought this site was so necessary. When you use my pages and applications, you know I've individually selected each card, and they include the features needed to make that free money we're all looking for, without having to worry about missing a condition in the application.

16.) What are the max fees listed with the cards?

This is another way the issuer can trip up the consumer. Sure they say 0% transfers, but most also charge a one time, 3% fee. This would cut your gains down to the point where it wouldn't be worth the trouble. The cards I have picked and listed for balance transfers either have no fees, or have a max fee (ex: $75). Now $75 isn't a whole lot when we are comparing that to what you make on that balance, and you don't have to pay that until you get all of your money from the interest. It isn't much of a concern, but it does factor into my rating system.

17.) Why are some cards and card issuers not listed?

The site and card selection has been designed around my main goal, which is to make the most money with the smallest amount of risk to our credit scores. The way I have it setup, you can apply for almost every card listed, attain a very high credit limit, and allow your credit profile to improve when everything is paid properly. Not to mention, these companies have the smallest chance of ever lowering your credit line or closing accounts. I can almost guarantee that I've personally looked into every card issuer available, and these are the best of the bunch. I will add more cards as time goes by, but not until I have good evidence that there is no risk to your accounts, or your credit score.